John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... 
Last month marked the best October since at least 1990 for home sales in the Denver.
There were 4,910 homes placed under contract in October, according to a report by independent broker Gary Bauer, who each month analyzes data supplied by Metrolist, which reflects homes sold by Denver-area Realtors. That eclipsed the previous October record of 4,839 homes placed under contract in 2005.
Based on demographics, it likely was the best October ever. The Denver-area population has grown by 49 percent from 1990 to 2007 (the latest numbers available), according to the Denver Regional Council of Governments. And the number of housing units from 1990 to 2007 in the area, grew by 40 percent. So with a much smaller base 19 years ago, it was unlikely that there were more sales in any October prior to 1990.
Bauer, at first, was even surprised by just how strong October was in terms of sales.
“Wow,” he said, when told by InsideRealEstateNews.com.
“It was an exciting October,” Bauer said. “There is a lot of pent-up demand out there. A lot of the activity had been driven by the tax credits for first-time home buyers. And now that that $8,000 credit for first-time home buyers has been extended, and expanded to include some existing home owners, I think we will see more people entering the market.”
A strong housing market helps not only those directly involved with it, but the entire economy, he said.
“For every $1 directly generated by the real estate economy, another $4 is created in the service industry,” Bauer said. “By that I mean, you buy a house and you buy furniture, TVs, garage-door openers. The list just goes on and on.”
Dee Chirafisi, the top Realtor in the Denver area last year and the co-owner of Kentwood City Properties, said she thinks the trend continued in November.
“Just in our office, we have seen an unbelievable number of houses placed under contract in October and November,” Chirafisi said. “We have twice as many homes that are going to close in November than we had a year ago.”
She agreed with Bauer and others that the home buying tax credit has been accelerating sales.
“Most of it is because of first-time home buyers and the tax credits,” she said. “”Most of our sales are under $400,000, although we have the occasional high-end sale. I just closed a home in Hilltop for $2.97 million, for example.”
She said the extension and expansion of the tax credit to include some existing home owners, will continue to fuel the market.
“If you wanted a reason to buy a home, and you needed a little push, this is it,” she said.
With 30-year fixed mortgage rates below 5 percent, homes reasonably priced, and an extension and expansion of the tax-credit, it hard to imagine a better time to buy a home, she said.
“This is the best time ever to buy a home,” Chirafisi said. “And there’s still plenty of homes to choose from, but I don’t know how much longer that is going to last. I think a lot of people are going to take their homes off the market for seasonal reasons, and are going to put them back on the market in the spring.”
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
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Year Under Contract Closings
1990 2,069 2,294
1991 2,520 2,364
1992 3,215 3,054
1993 3,093 3,348
1994 2,439 3,279
1995 2,300 3,186
1996 2,842 3,197
1997 2,961 3,578
1998 3,528 3,795
1999 2,830 3,824
2000 2,821 4,499
2001 2,076 3,882
2002 2,306 3,931
2003 2,285 4,292
2004 2,731` 4,443
2005 4,839 4,174
2006 4,715 4,133
2007 4,645 3,848
2008 4,504 4,282
2009 4,910 3,958
[...] There were 4,910 homes placed under contract in October, a 9.0 percent increase from the 4,504 homes sold in October 2008, shows a report released today. It was the best October for Realtor-sold homes in the Denver area in at least 19 years. (For more on the sales, read this blog.) [...]
"Denver metro home resales drop in October" – is this interesting that this is the Denver Post's headline for October sales compared to yours? Is it true?
Closings were down, but under contracts were up. But I believe that under contracts provide a better snapshot of what happened in a given month than closings. The reason is because under contracts take place in that given month, so it reflects the activity of that month.
Closings, by contrast, reflect sales activity in prior months, but we have no idea what months. In this market, for all we know, some closings that took place in October, could have been placed under contract in March or April. Some brokers make the argument that closings are more important because they are done deals, while a certain number of homes placed under contract will not close. That is certainly true. while closings are an important metric, they just don't reflect the activity of any given month as well as under contracts. It can also be misleading. I have seen months when the market was going south, but closings were way up. The reason? It was taking so long to close homes, that a lot of homes that typically would have closed in June, instead closed in September, let's say.
Finally, I think most people equate placing a home under contract with selling it. People come to the office and say, "I sold my house," when it is placed under contract. Typically, when it closes three, four or five months later, in a weary tone of voice they say, "I finally closed on my house yesterday."
[...] Best October for under contracts [...]
[...] Best October for under contracts [...]
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